U.S.-EU Skies - The Time Is Now!

By Ambassador Eduardo Aguirre

European Transport Ministers face an historic decision on March 22: whether to approve the transatlantic Open Skies Plus aviation agreement recently negotiated by American and European Commission officials. The United States, the Commission and most EU member states strongly support this agreement. But EU approval must be unanimous, and at least one member state faces intense pressure from protectionist commercial interests to veto it.

It is critical that the Transport Council seize this historic opportunity to promote competition, growth and legal certainty - and reject protectionism - in the U.S.-EU aviation market, which is so crucial to the broader health of the two economies.

To understand why this agreement is so important one must understand the archaic features of the status quo in U.S.- European aviation. Instead of one over-arching agreement governing transatlantic skies, the United States has twenty- two bilateral agreements with member states. Only sixteen of these are liberal, Open Skies agreements. The rest include a hodgepodge of restrictive agreements, with
excessive government regulation, unnecessarily limiting travel and trade between the United States and much of Europe. Another limitation is that under all these
agreements, European airlines may only fly to the United States from their home country. Compounding these flaws, the European Court of Justice ruled in 2002 that all of
these bilateral pacts are inconsistent with EU member states' obligations under EU law, creating uncertainty in a transatlantic market the covers 60 percent of global
aviation traffic.

The U.S.-EU Open Skies Plus agreement will correct all these problems. Its liberal, pro-growth provisions will apply uniformly and predictably to the whole European Union
and replace the confusing patchwork of bilateral agreements for all time. The new accord will also solidify EU efforts to establish a single European market because European
airlines, regardless of nationality, will be able to fly from any EU city to any city in America. For the first time, Lufthansa will be allowed to fly from Prague to New
York. British Airways will be allowed to fly from Paris to Chicago. Lufthansa, BA and Alitalia can all compete to offer service from Rome to Washington.

Instead of working around old-fashioned government restrictions, airlines will be able to make decisions about what service to offer based on commercial determinations in
the market. The resulting competition should increase travel options and reduce fares for passengers, as well as companies whose business depends on extensive air cargo
links. Granting new traffic rights to EU airlines also opens the door to cross-border airline mergers within the EU, which is possible today only if airlines are prepared
to place their international operating rights in jeopardy.

The U.S.-EU Open Skies Plus agreement also confers many other benefits. One of the most valuable is that it would et rid of the especially restrictive bilateral aviation
agreement between the United States and Britain. This relic from a bygone era of aviation governance limits service between the two countries at London Heathrow
airport to just four airlines, two British and two American. There is absolutely no reason why Heathrow should operate according to different competition rules from Paris, Warsaw or Athens, and the new agreement will see that it does not.

It is no coincidence that the agreement's most vocal opponents include airlines that profit the most from the current anti-competitive restrictions at Heathrow. Other Europeans should not be fooled. Whatever these companies' stated objections to the new agreement, the main reason they don't like it is that it will end their ability to earn monopoly profits from outmoded government protection. European and American consumers, as well as other airlines that want to compete in this market, will be the winners.

A positive decision by Transport Ministers would be the climax to four years of negotiating effort. While the United States has long maintained that the agreement
confers balanced benefits, U.S. negotiators made significant additional concessions in the latest round in order to close the deal with the European Commission. Once this agreement is concluded, the two sides have also committed to resume negotiations very soon on a "second stage" of further aviation liberalization.

The proposed U.S.-EU Open Skies Plus agreement is good for both Europe and America. It is the best agreement available, and the time to approve it is now. Demanding additional concessions or delaying action in favor of further "study" would mean failure to reap the very real benefits this agreement offers, perhaps for years, and playing into the hands of its small number of protectionist critics. The United States looks forward to an affirmative decision by the EU Transport Council.
 

back to top ^